Bank Transfer Day: A Guide to Closing Your Account

To protest the behavior of big banks, thousands pledged to switch to small credit unions on November 5. It’s not too late to join them by following these steps.

Photo by Alan Cleaver.

posted Oct 25, 2011

Bank Transfer Day is gaining some serious steam. Although it's not
technically affiliated with Occupy, it's being embraced by the movement
and is the first specific call to action since the Occupy protests began.

The description and goal of Bank Transfer Day
is straightforward: If you currently have checking and savings accounts
(deposit accounts) with a big bank, the organizers encourage you to
remove all of your funds, close your accounts, and place your money in a
new deposit account with a not-for-profit credit union. The organizers
ask that you do this by November 5. And since November 5 is a Saturday,
you should definitely do it before November 5 since many big banks aren't open on weekends.

Bank
Transfer Day can significantly impact the way banks are able to make a
profit. In simplest terms, banks rely on our deposit account balances to
make loans that net substantial profits. Without our deposits, banks
can't make loans. And if banks can't make loans, they're going to take
notice. And they're surely going to freak out.

So if you
currently have a deposit account with a big bank and you want to
participate in Bank Transfer Day, read the following steps. It's a field
guide that will help you accomplish this meaningful task of shifting
your money from corporations that serve the 1% and put it with an
organization that cares about the remaining 99%.

What You Need To Do Before Walking Into Your Big Bank Branch

Go through previous big bank statements to see exactly which accounts
you have. Be sure to check the names on each account. If you are closing
a joint account with two holders, it makes a difference whether the
word joining your names is "and" or "or." If the account in your name is
in your name and someone else's, you will both need to go in and close the account. If the account is in your name or
someone else's, either of you can close the account. Some big banks may
vary on this policy, so it's best to call your big bank to find out
exactly what you need to do prior to walking into your local branch.

If you have any loans with a big bank, look closely at your statements
and paperwork you signed at the time of closing. There very well might
be penalties that will trigger a higher interest rate if you close your
checking account. Big banks excel at offering customers lower interest
rates on mortgage and auto loans if you open a checking account and
maintain a minimum balance. A primary checking account is a bank's
ultimate goal to securing your, ahem, loyalty. A primary checking
account also leads to, on average, the opening of three additional
accounts with that financial institution. Decide whether or not you can
or have the willingness to pay off the outstanding loan balance. If you
do not pay off the loan balance, call your bank to ask about escalating
fees or rate increases by closing your checking account before walking into your local branch to close the checking account.

Stop using your deposit accounts ASAP. You need to allow everything to
clear the accounts completely before you close them. This clearing
process takes about two weeks to complete. Keep close tabs online to see
which transactions are still outstanding.

Research non-profit credit unions. You will need a place to deposit your money, so perform this research before closing your big bank accounts. A good resource for finding credit unions is Find A Credit Union. Make your decision on which non-profit credit union you will join before walking in to the big bank branch to close your deposit accounts.

What To Do When You Walk Into Your Big Bank Branch

Approach a branch teller and tell him/her that you would like to close
your accounts. The teller might hand you off to a customer service
representative due to the bank's account opening and closing protocol.
Or the teller might hand you off because they don't want to tie up
customers' wait time in the teller line.

If the bank employee
asks why you are closing your account, decide in advance the reason
you're going to provide. You can tell them you're unhappy with big
banks. You can tell them you're a part of the 99%. Or you can decline to
give them a reason. The most important thing is to remain focused and
not do anything imprudent that will keep you from accomplishing your
goal of closing your deposit accounts and walking out of the big bank
branch with your money.

Once the account closing process
begins, ask the bank employee if you have any cash reserve accounts tied
to your deposit accounts. It doesn't make sense to keep a line of
credit open that was tied to your soon-to-be closed account.

The bank employee will ask if you would like to receive your money in
the form of a check or cash. If you want to make it rain outside of the
big bank branch, request to receive cash. If you don't want to make it
rain, we advise you to request a check.

The bank employee will
either give you a confirmation letter of your accounts being closed or
they will mail it to you. Once you receive the letter, keep it on file
for up to five years.

Walk out of the big bank branch.

What To Do After You Have Closed Your Big Bank Deposit Accounts

Shred all remaining checks and debit cards. This is an essential step.
If you mistakenly use the checks or debit cards, you will be going back
to the big bank branch—except this time it will be to clean up your
mess.

Go to the non-for-profit credit union you selected prior
to closing your deposit accounts at the big bank. Open the accounts,
get a new checkbook and debit card, and shake the employee's hand, or even
give him/her a hug.

Sync up your new deposit account
information (ABA routing number and account number for checks, card
number, expiration date, 3-digit security code for debit card) to any
relevant accounts that require automatic payments. For example, if you
automatically pay your car insurance on a monthly basis with your
checking account, be sure to sync up your checking account with your car
insurance company. You may also want provide your new account
information for online products such as iTunes, eBay, and PayPal.

That's all there is to it. Sounds like a lot, and perhaps it is. After all, big
banks played a role in making this process difficult because it acts as
a deterrent for people to withdraw their money and close their
accounts. But if you stick to this guide and remain focused on your
goal, you can impact meaningful and measurable change by participating
in Bank Transfer Day.